--%>
Assignment Help - homework help

Describe utilization of a risk-adjusted discount rate

Describe how utilizing a risk-adjusted discount rate develop capital budgeting decision making compared to utilizing a single discount rate for all projects?
The risk-adjusted discount rate develop capital budgeting decision making compared to the single discount rate approach since the RADR lets us to set a higher hurdle for the high risk project and a lower hurdle for the low risk project therefore aligning our capital budgeting decision making procedure more closely with the goal of maximizing the value of the firm.

   Related Questions in Finance Basics

  • Q : Describe primary reasons that companies

    Describe primary reasons that companies hold cash? Companies hold cash to make essential payments, to take benefit of opportunities as they arise, and to cover unforeseen emergencies.

    		•
  • Q : Pros and cons of commercial paper

    Describe pros and cons of commercial paper associated to bank loans for a company seeking short-term financing? Usually commercial paper is a cheaper source of short-term financing for a firm, compared to bank loans. Also, a larger amount of fu

    		•
  • Q : Effect of foreign imports Normal 0

    Normal 0 false false

    		•
  • Q : What is means of correlation

    What does this mean while we say that the correlation coefficient for two variables is -1? What does it mean if this value were zero? What does it mean if it were +1?Correlation is calculated by the correlation coefficient, represented through t

    		•
  • Q : Factors affecting option of maximum

    Describe the factors affecting the alternative of a maximum cash balance amount. The maximum cash balance amount is finding out by obtainable investment opportunities, the expected return on investments, and the transaction cost of making invest

    		•
  • Q : Private closed economy based question

    Normal 0 false false

    		•
  • Q : Define Organization Code Organization

    Organization Code: The four-digit code allotted to each state governmental entity (and at times to exclusive budgetary programs) for fiscal system aims. The organization code is the initial segment of the budget item or appropriation

    		•
  • Q : The official unemployment rate Normal 0

    Normal 0 false false

    		•
  • Q : Explain the investment opportunity

    Explain the investment opportunity schedule (IOS)? How does it help financial managers take business decisions? The investment opportunity schedule illustrates graphically proposed capital budgeting projects depicting the IRR and dollar amount

    		•
  • Q : Define Sponsor Sponsor : It is an

    Sponsor: It is an individual, group, or organization which initiates or brings to a Legislator's attention a proposed law modification.

    		•